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it didn't trickle down
Executive order to promote compe ion policy to be issued tomorrow.
https://www.politico.com/news/2021/0...opolies-498876The White House is scheduled to issue an executive order Friday to promote compe ion throughout the U.S. economy in the most ambitious effort in generations to reduce the stranglehold of monopolies and concentrated markets in major industries.
it didn't trickle down
Heather Bresch is Joe Manchin's daughter.
Emails show how she schemed to cornered the market on EpiPen, raised prices, concocted a bogus rationale to make it a two pack and deliberately hid info from the FDA.
https://theintercept.com/2021/09/07/...eather-bresch/
Pfizer, while denying wrongdoing, has since settled a class-action suit for price fixing and will pay $345 million over the company’s practices related to the EpiPen market. A suit against Mylan, which also denies wrongdoing, is ongoing, and Bresch has faced scrutiny in the past for the company’s pricing of the lifesaving drug. In 2019, Mylan officially merged with Pfizer’s Upjohn unit to form a new company, Viatris, and Bresch began the process of stepping down, taking with her a $37.6 million exit package. She retired from Mylan in December 2020.
Joe Manchin not good now.Heather Bresch is Joe Manchin's daughter.
Emails show how she schemed to cornered the market on EpiPen, raised prices, concocted a bogus rationale to make it a two pack and deliberately hid info from the FDA.
https://theintercept.com/2021/09/07/...eather-bresch/
meat prices are a big driver of food inflation
"heads i win, tails u lose"
monopoly has crapified healthcare and has made it more expensive
The Corrupt System Behind Covid Medical Shortages
Why are we still facing shortages of masks and medicine a year and a half after the start of the pandemic?
Because a buying cartel controls medical supplies, and has for 25 years.
https://mattstoller.substack.com/p/t...-medical-suppl
=====================
2 Powerful Groups Hold Sway Over Buying at Many Hospitals
https://www.masimo.com/company/news/...any-hospitals/
====================
How GPOs INFLATE Healthcare Costs
https://www.physiciansagainstdrugshortages.com/gpos-inflate-hc-costs.html
Is there any major economic sector that isn't totally corrupt?
the seamy underbelly of efficiency and just-in-time inventory -- monopolies create bottlenecks and inflate prices
https://mattstoller.substack.com/p/c...-a-monopolizedFor forty years, everyone but logistics professionals have had the luxury of ignoring the details of how we make, ship, and distribute things. Stuff just kind of showed up in stores for consumers. Economists who talk about the broad economy, meanwhile, were obsessed with money; they thought about the Fed printing more or less of it, or taxing and spending. They too assumed stuff just kind of shows up in stores.
Yet, using this macro-framework is oddly divorced from what people are experiencing. Much of the handwaving - the assumption that things will return to the way they were and it’s just a matter of waiting, or that everything is driven by money printing or government spending - reflects the intellectual habits borne from not having to think about the flow of stuff.
There is a third explanation for inflation and shortages, and it’s not simply that the Fed has printed too much money or that Covid introduced a supply shock (though both are likely factors.) It’s a political and policy story. The consolidation of power over supply chains in the hands of Wall Street, and the thinning out of how we make and produce things over forty years in the name of efficiency, has made our economy much less resilient to shocks. These shortages are the result.
Uber’s attempt to monopolize the taxi market with cheap prices, and the resulting shortage years later after the market was ruined, is a very simple way to understand the situation, if you imagine that taking place across multiple industry segments beyond taxis. Monopolistic business models often appear to be efficient or good for consumers - for a time - but end up destroying productive capacity on the backend, which then creates or worsens a shortage. In that case, cab drivers, who used to be able to make a reasonable living, haven’t really come back.
Two years ago, I coined the term “Counterfeit Capitalism” to describe this phenomenon. I focused on the fraudulent firm WeWork, which was destroying the office share market with an attempted monopoly play turned into a straight Ponzi scheme, enabled by Softbank and JP Morgan. Like counterfeiting, such loss-leading not only harms the firm doing the loss-leading, but destroys legitimate firms in that industry, ultimately ruining the entire market.
In the gig economy, the consequences are becoming clear, as Kevin Roose of the New York Times noted a few months ago in a story led “Farewell, Millennial Lifestyle Subsidy.” But beyond Uber and the gig economy, or firms like Amazon that pursue loss-leading strategies, such destructive business practices are also routine.
Take lumber, whose pricing increased dramatically earlier this year. As Sandeep Vaheesan pointed out, there’s a very clear predatory pricing monopoly story here. In the early 2000s, Ross-Simmons Hardwood sued lumber giant Weyerhaeuser Co. A key cost for lumber mills is the price of logs, and Ross-Simmons accused Weyerhaeuser of artificially paying more for logs to drive compe ors out of business. This practice was similar to Uber incurring losses to subsidize the cost of rides to underprice taxis and capture the market, only in this case it was Weyerhaeuser incurring losses to keep the price of logs higher than they should be.
As Vaheesan put it, this behavior changed the market. “Why invest in sawmills,” he asked, “if dominant players will buy up necessary inputs as a means of crushing the margins of compe ors?” Though a jury agreed that Weyerhaeuser was engaged in predatory conduct, in 2007, the Supreme Court ruled in favor of Weyerhaeuser. And whaddya know, during the pandemic lumber prices ed, even as tree growers didn’t see the benefit. More broadly, this ruling undermined small producers in capital heavy industries, who had less of a reason to invest in capacity.
This decision, like many others, was part of a forty year trend of facilitating monopolies. It wasn’t necessarily done in bad faith; policymakers followed the lead of economists, who believed dominant firms were dominant because they were efficient. This faith in efficiency over all else meant that the public structuring of markets to force resiliency - aka regulation - was illegitimate. So too were attempts to use public rules like tariffs to retain domestic production of key goods.
Alas, this philosophy has led to a series of bottlenecks in our supply chains, which are now global. After all, what else is a monopoly but a business model designed to secure or create a bottleneck? It is those bottlenecks that are worsening, or in some cases, creating the shortages we see all around us, on a worldwide scale.
I first noticed the problem of concentration and supply in 2011, when I wrote a piece on shortages of specialized video tapes, a result of the earthquake in Fukushima and the consolidation of productive capacity in that region. Before digitization, such video tapes were necessary, not to watch shows, but to film them. Because of the shortage, the NBA scrambled to get enough tape to broadcast the NBA finals, with one executive saying, “It’s like a bank run.” Why was this shortage so acute? The earthquake halfway around the world had knocked offline a Sony factory that made them. That was known an industrial supply chain crash, like a bank run, only with actual inputs and outputs of real world stuff.
This wasn’t the first such industrial supply chain crash in the era of globalization. There was one in 1999, when an earthquake in Taiwan hit semiconductor production, causing factories all over the U.S. to shut down and firms like Dell and Hewlett-Packard to stop selling computers. The key to these supply crashes was the consolidation of production in one area, often under the guise of trading off resiliency for efficiency. This was also the logic behind mass outsourcing of production.
Similar to the lead-up to the financial crisis, policymakers only saw in these trends the efficiency of large firms and beautiful global supply chains, not the pooling of hidden risk. The intermingling of banks and shadow banks into a complex and unknowable system caused a huge crash in 2008. Who knew AIG, Goldman Sachs, and fly-by-night California mortgage lenders connected to German land banks? Certainly regulators didn’t. The same is happening in slow motion with our supply chains. As one trucker noted, his Freightliner is in the shop due to a broken air line, and he was told that shop had seven other trucks sitting there with a similar issue, and so they can’t truck anything. That specialized part to repair his vehicle is no longer made domestically, but must be… trucked in from Mexico or Canada. See the problem?
1) Monopolies manipulate prices and lower supply. Unregulated firms with market power raise prices, cut wages, and reduce supply. That’s just what they do. A very simply example of this problem is in the beef, poultry, and pork industry, the three types of meat that are responsible for roughly half of the inflation in food.2) The Keurig Interoperability Problem: Then there are the artificial bottlenecks produced on purpose to exploit market power. For instance, why don’t we have enough specialized plastic bags to use in making vaccines?Over the past fifteen years, the producers of biopharmaceutical equipment consolidated the entire industry, such that there are really four producers each of whom sells, in business school speak, an “integrated set of products” to pharmaceutical firms who want to make stuff.
3) Right to Repair, or the McDonald’s Ice Cream Problem: Another artificial bottleneck created to facilitate certain corrupt business models is to prevent firms from repairing their own equipment.
For instance, why is McDonald’s often out of ice cream? Their ice cream machines are always broken, leading to unhappy customers and frustrated franchise owners. There’s no shortage of vanilla, cream, sugar, or other inputs, but McDonald’s, and the food equipment conglomerate Middleby, do not allow franchise owners to repair their own equipment, because allowing that would jeopardize the fat maintenance equipment fees they get from servicing overly complex machines. And so there’s a shortage of ice cream.
4) Infrastructure Monopolies: One of the most problematic monopolies is that of Taiwan Semiconductor (TSMC), which is the main fabricator of high-end chips used in everything from phones to computers to cars, whose customers include every major tech firm. Semiconductors, like oil, are infrastructure at this point, going into a large swath of products. Infrastructure monopolies are bottlenecks whose effects cascade down supply chains. I mean, PPG, which is a paint conglomerate, is pointing to chip shortages as a cause of its supply disruptions.
As Alex Williams and Hassan Khan note, sustained national investment by Taiwan, combined with disinvestment by the U.S. government, led to the consolidation of manufacturing capacity in TWSC. Additionally, TWSC engaged in dumping of products on the U.S. market in the 1990s, which is a form of predatory pricing. Intel, rather than focusing on competing, organized itself around monopolization, and thus loss the technological lead over semiconductor production in the early 2010s.
The net result is that we are now highly dependent for a key form of infrastructure on a monopoly that cannot expand as quickly as necessary, and that is halfway around the world in a drought-riven geopolitically sensitive area. Disruptions or supply shocks thus mean begging Taiwan for one’s ration of semiconductors.
But there are many other infrastructure monopolies we’ve facilitated over the last forty years. There are, for instance, railroads, an industry where there used to be 30+ compe ors, and which now has seven monopolistic rail lines that are constantly reducing service and destroying freight cars. Railroads, like many network systems, require not only compe ion, but regulation, or else the incentive to disinvest by owners is too strong. For instance, in 2019, the Union Pacific shut down a Chicago area sorting facility to increase profit margins for its Wall Street owners. As a result, in July of this year, the rail line had so much backed up traffic in Chicago that it suspended traffic from West Coast ports. Such a suspension of service backed up port unloading, causing a cascading chain reaction, delays piled upon delays.
5) Power Buyers and Economic Discrimination: Then there’s price discrimination to remove small players from the market. One BIG reader, an administrative assistant at a small college, noted she’s seeing “shortages in previously plentiful food items.” There are a host of foods they can’t get anymore. “We order from Sysco mainly, and we sometimes can't get basic things like y chicken breasts for sandwiches. We get the same y chicken that Wendy's serves, so we presume Wendy's is taking priority on this.” Sysco has tremendous market power in food distribution, it is what is known as a power buyer, using a system of rebates to coerce suppliers and buyers into using its services.
Power buying is why large firms like Walmart are out-competing small ones. Walmart, for instance, tells its suppliers they must deliver on time 98% of the time, or it will fine them 3% of the cost of goods. “Known in the industry as "power buyers," large retailers have had an advantage for years when buying goods because they order larger quan ies than smaller wholesalers do,” wrote CNN’s Nathan Meyersohn on this problem. “Large retailers' scale and buying clout make them a top priority for manufacturers, he said, and they often get promotions, special packaging or new products early.”
Price discrimination means smaller firms, both producers, distributors, and retailers, can’t get access to what they need to do business, and small firms are often more flexible than big ones, and serve customers in rural or niche areas.
This thread is a flaming indictment of the country.
Boutons gets for his cynicism. I am reaching the conclusion that there is no saving the country at this point.
He is more right than many would admit to. ed and un able.
Biden bros getting restless
Your team put up the candidate that Biden routed.Biden bros getting restless
The voters got the orange mass out but he still infests the party.
Still begging for his endorsement.
When the in bent shows you he is an ass... consequences.
Is it as bad as your wife's saggy s?
(copped his from ducks)
This image of empty shelves is proof positive that there's no more food or goods in the US.
Put that on my Bingo card. I just commandeered it.
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